Panasonic expects to book record ¥780 billion net loss

Bloomberg, Kyodo

Panasonic Corp. forecast a record net loss of ¥780 billion for the current year, making it the latest consumer electronics giant to predict declining earnings because of the stronger yen, a slower global economy and the floods in Thailand.

The revision compares with the ¥420 billion loss the company predicted in October.

The loss in the 12 months ending in March will be the biggest since Osaka-based Panasonic was founded in 1918, exceeding the ¥427.8 billion it posted in March 2002.

The world’s largest maker of plasma TVs has joined Sony Corp. and Sharp Corp. in increasing loss forecasts as manufacturers struggle to cope with the yen trading near postwar high levels, damping the repatriated value of their overseas sales.

The massive projected loss also stems from the major electronics maker’s decision to write off ¥250 billion in one-off costs associated with the acquisition of Sanyo Electric Co.

Panasonic is writing off all the goodwill value of Sanyo — the difference between the acquisition price and the net assets — in one go during the current business year to eliminate a major source of concern over its ability to improve its earnings from the next fiscal year.

A slow global economy also is hurting sales after the floods in Thailand and the March 11 disasters crippled plants and suppliers.

“The consumer electronics business and components business are slower than the company’s plan due to weaker fundamentals and a stronger yen,” Jeff Loff, a senior analyst with Macquarie Capital Securities in Tokyo, said before the earnings announcement.

Global LCD TV shipments probably rose 8 percent to 206 million units last year, falling short of an earlier projection of 211 million units, according to an October forecast by DisplaySearch.

The shipments rose 13 percent in the quarter that ended Dec. 31 from a year earlier, according to the researcher, which estimates annual shipments will rise 10 percent in 2012.

The maker of Viera televisions and Lumix cameras in October halted operations at its three factories in Thailand, which make home appliances and other products, following the nation’s worst floods in 70 years.

The company is boosting output and buying more parts overseas as gains in the yen make it more expensive to manufacture goods in Japan.

Panasonic will invest ¥45 billion to build a plant for solar cells and modules in Malaysia, the company said in November. The company also is shifting its procurement base to Singapore from Osaka to procure more parts in Asia.

Like other Japanese electronics makers, Panasonic is also struggling due to deteriorating conditions in the TV market amid cutthroat competition from rivals such as South Korea’s Samsung Electronics Co.

Sharp Corp. on Wednesday projected its largest-ever net loss, some ¥290 billion, for fiscal 2011 due to the sluggish liquid crystal display business.

Also Thursday, Sony said it expects a group net loss of ¥220 billion in the current year, more than doubling its earlier projection of a ¥90 billion loss, on restructuring costs to rebuild its TV business and the adverse impact of last year’s flooding in Thailand.